A legacy of waste: How 4 Navajo housing projects broke down

The Navajo Housing Authority and its building partners have spent hundreds of millions of tax dollars across the sprawling reservation since a new federal housing law and finance system was enacted for Indian country in 1998.

The Native American Housing and Self-Determination Act funded many tribes’ ventures, but federal reports document a legacy of waste on the Navajo Reservation.

A 2006 report by the Inspector General’s Office concluded that the Navajo Housing Authority failed to prevent recurring cases of misappropriation, overspending and excessive delays. Auditors found $53 million was spent over three years on 14 housing projects that were never started, left unfinished or financially mismanaged.

A 2014 Government Accountability Office report detailed how homes and shelters were built with U.S. tax dollars, never inhabited, and eventually demolished because of structural, legal and financial problems. The NHA was assessed $13.5 million in penalties.

The federal government is currently trying to recover $96 million, saying the NHA “failed to provide needed affordable housing to its tribal members.”

Here are some examples of how federal funds were spent.

ANETH, UTAH — About two dozen relatively new homes in this rural town stand as seeming proof that, at least here, the Navajo Housing Authority fulfilled its mission.

Appearances can be deceiving.

The tract, called Aneth 23 for the number of homes, overlooks McElmo Creek about 25 miles north of Four Corners Monument. Nearly a decade ago, residents said, the NHA moved them out of an existing development and tore down their old Housing and Urban Development homes.

Modern, new dwellings were promised. And Daren Roberts, 43, who lived in the Aneth HUD project most of his life, eventually got a nearly 800-square-foot, three-bedroom house.

But there is more to the story.

First, Roberts said, demolition of the older dwellings was delayed four years. While construction was underway for another four years, he lived 55 miles away in Shiprock, N.M., receiving an NHA subsidy to cover his rent.

About three years ago, construction ended. Families moved back. And disappointments began.

Residents said they discovered shoddy construction and cheap materials.

Roberts chose a propane water heater and electric stove, but got the opposite.

He requested an indigo roof; his is cream.

He’s barred from building fences, which would delineate his yard from his neighbor’s, because the property line is unknown.

One of Roberts’ neighbors, 38-year-old Cassandra Merritt, has lived in Aneth since she was 5 — except the years in a trailer awaiting construction of a new home. She and her mom, Rose, were brimming with anticipation of the move-in date.

“Now, we’re inside, and we have all these problems,” Merritt said.

She pointed out soil erosion that threatens to undermine the foundation, and then led a tour inside the home.

A bucket caught leaking water beneath the kitchen sink. A dryer vent was useless, apparently installed in the wrong place. The front door wasn’t flush, allowing sand to blow in. A rain spout was misplaced so roof runoff creates a mud bog at the entryway.

Merritt said she repeatedly complained to NHA officials. The answer was always the same: “It’s not in the warranty.”

Roberts said his grievances, too, were shrugged off by the NHA.

Cholla Managing Group of Chandler built the 23 homes in Aneth after winning a $3.3 million NHA contract. Jaafe Kellis, managing partner, declined to answer questions about the project. The company has done work for other tribes in Arizona, and has no complaints with the state Registrar of Contractors.

Aneva “AJ” Yazzie, the NHA’s chief executive, said there was an 18-month warranty period and the NHA addressed all but a few minor issues, such as paint touch-ups. She added that all warranty work was “satisfactorily completed” before the project was closed. If some minor issues were not resolved it was because the residents were not home or available, she said.

“They tell us, ‘You got a house. Quit complaining,’” Roberts said. “The whole time I wondered, ‘Where’s the money going?’”

After a brief pause, Roberts smiled. With subsidies, the monthly mortgage was supposed to be $80. Because of all the problems, he said, the NHA waived that cost. So, he lives in his home for free.

Roberts said other promised improvements — paved roads, a highway sound barrier, street lights and 1-acre plots — were left undone. (After The Arizona Republic raised questions in 2015, a road through the development was paved).

Roberts said the Housing Authority also has made some repairs since The Republic began asking questions. But he and his neighbors still complain about a lack of water pressure and electrical problems.

“They told us the other things would be fixed,” Roberts said, “but they never came back.”

KAYENTA — A chilling wind blew through town as Genevieve Black Water, 47 and homeless, slowly moved through a field of weeds and then sought protection beside a small hillock.

Roughly 25 yards away stood the Kayenta Women’s Shelter with at least a dozen apartments for 48 people. There’s a covered play area for children, protected by a 12-foot razor-wire fence. After dark, bright security lights illuminate the property.

Black Water said she would have loved to spend the night there instead of hunkering down in the adjacent field of lumpy vegetation, where empty bottles of cheap booze litter the landscape.

“When people are homeless and hungry, we should be able to go in there,” Black Water said.

But the shelter remained shuttered for nearly 18 years after being built.

Records show the NHA spent at least $2.8 million in federal funds to build the facility in 1998-99. After construction was mostly completed, the NHA spent at least another $1.3 million to repair broken water lines and a faulty sprinkler system.

The shelter then became mired in financial and political conflicts.

It finally opened this fall, after The Republic began investigating problems with the Navajo Housing Authority. The shelter received financial assistance from outside organizations and the Kayenta Township to open.

NHA Chief Executive Aneva “AJ” Yazzie previously told The Republic the shelter went unused for nearly two decades primarily because a non-profit organization, Tohdenasshai Committee Against Family Abuse, didn’t muster enough money to run the program.

However, Geraldine Laughter, director of Tohdenasshai from 2001 to 2011, said there never was an issue with operational funding.

Tohdenasshai’s publicly filed tax forms show the agency has received up to $1 million annually in grants and contributions since 1999-2000. In the most recent tax return available, Tohdenasshai had nearly $5.8 million on hand.

Laughter, now a Kayenta Township executive, said the real obstacle was the NHA’s inability to deal with construction and permitting problems. She said the Kayenta Township recently helped provide labor to repair and clean the building to get it open.

Laughter said the shelter is housing a few people. Elsie Smallcanyon, the shelter’s director, did not return calls.

TOLANI LAKE — Travel to the Arizona badlands 65 miles northeast of Flagstaff and you will come across this curious sight: A handful of igloo-shaped structures surrounded by fencing.

Each dome here contains empty apartments — about three dozen units.

The project was launched around 2003 with $4.4 million in federal grant funds. It was supposed to provide housing for staff at a nearby elementary school. Instead, it became a symbol of money wasted.

The U.S. Department of Housing and Urban Development provided cash to the Navajo Housing Authority, which approved sub-grantee Tolchii Kooh Inc. to build and manage the homes.

Around 2006, before work was finished, the school closed. So did Tolchii Kooh Inc.

An audit in 2007 by the HUD Office of Inspector General concluded that Tolchii Kooh “did not have experience in construction activities or the capacity to properly oversee its contractor. ... The project experienced significant delays, issues with poor construction quality, and a failure to properly budget for construction costs.”

The domes became white elephants — icons of ineptitude in the village of Tolani Lake, population 280.

The NHA spent another $2.5 million in 2008 to refurbish the vandalized apartments as prospective rentals.

Architect Loren Sadler, who designed the structures and helped with rehab, recalled it seemed strange because, even then, no one moved in.

“They were just left after that,” Sadler said. “And yet they (NHA officials) were always talking about the lack of housing.”

As with many failed projects on the Navajo Reservation, key players privately blame one another, but refuse public comment for fear of not being considered for future NHA funding.

Joe Hancock, owner of BMJS Contracting Inc., the construction overseer in Tolani Lake, did not return calls. Thomas Walker Jr., who was president of the school, said design issues and cost overruns stymied the project. He declined further comment.

Tolchii Kooh also was awarded $2.1 million to develop nearby homes for the elderly. Sadler said he designed one of the group homes built in Bird Springs. It has never been occupied.

“As architects, we love to draw. We love to design,” Sadler said. “But the true joy comes when you see people occupy your vision. And that was never realized.”

Yazzie, NHA’s chief executive, said she’s given up on plans to salvage the domed apartments.

“What’s crazy is, I don’t know how NHA ever funded them without the school,” Yazzie said.

ST. MICHAELS — Piñon pines surround a homesite at the end of a curving dirt road about one mile off the highway.

The lot overlooks a cornfield and the family homestead where Pauletta Tsosie, one of 14 kids, was born in a cabin five decades ago. A sister lives on one side. Sheep and horses graze below the hillside.

Tsosie hopped out of her pickup truck during a May 2015 visit, bubbling with enthusiasm: The NHA had begun building her dream home not far from the Arizona-New Mexico state line.

“I’m really excited to see this home going up,” said Tsosie, who first applied for NHA housing in 2002. “I’ve waited for many years — since my daughter was in third grade, and now she’s in college. ... My late father, he always told me, ‘If I were you, I’d build a house here.’”

Asked why she’s waited so long, Tsosie laughed.

“It’s the NHA. They say, ‘Well, maybe next year,’” she said. “They kept telling me to re-apply and re-apply. So, I kept putting my application in every year. I had to follow up four to five times a year.”

Her persistence paid off.

Blueprints called for a three-bedroom, 1,283-square-foot home. It was expected to cost the NHA $311,000 for construction, including a septic system and other expenses. The Indian trust land was free. Tsosie will pay a $1 annual lease.

This November, 18 months after the excited visit, she’s still waiting to move in. The new, salmon-colored house with aqua-blue trim sits atop the hill, seemingly finished.

But the water line is not yet installed, and there are problems with the septic system.

A 6-foot chain-length fence had surrounded the empty dwelling — protection from potential vandals.

It’s been 14 years since Tsosie first applied.

“I really don’t know what’s going on,” she said. “I keep asking them, and they say ‘next month, next month.’ It’s almost winter. I’m thinking it won’t get done until next spring.”